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Economic News, Data and Analysis

Tax Plans, The Details

Here’s the House version and the Senate version.
The costs as estimated by the Joint Committee on Taxation can be found for the House and Senate.
Note that the “$350 billion” Senate tax cut is already starting at $415 billion – and this is calculated with the unrealistic provision that the dividend tax cut would only be in full effect for one year in the next 10 before being restored in 2006.
The current Senate plan calls for the dividend tax to be “…phased-in as follows: 33% in 2003, 67% in 2004, and 100% in 2005; sunset 12/31/05.”
Why this strange structure? It’s to try and cram the largest permanent dividend tax reduction possible under the $350 billion line. While not violating the letter of the budget resolution, this kind of accounting game certainly violates the spirit of the agreement.

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Filed under: Fiscal Policy

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